Long Opportunies In Both T-bonds and S&Ps
| PREVIOUS POSITIONS | ||||
|---|---|---|---|---|
| Market |
Long/Short |
Enter | size=2 color=000000>Exit | size=2 color=000000>P/L (per contract) |
| Sep. 99 T- bonds | Short | 117-05 | 116-28 | $281.25 |
| Sep. 99 S&Ps | Short | 1429 | 1410 | $4750 |
| Sep. 99 Swiss franc | Short | .6590 | .6585 | $62.50 |
CURRENT POSITIONS (AS OF 7/23/99) |
|||||
|---|---|---|---|---|---|
| Market | Date | Long/Short | Enter | Stop | size=2 color=000000>Target |
| Sep. 99 T-bonds | 7/23/99 | Long | 115-18 | 114-14 | – |
| Sep. 99 S&Ps | 7/22/99 | Long | 1370 | 1348 | 1385 |
| Sep. 99 Swiss franc | – | Flat | – | – | – |
Note: All price levels are approximate.
T-bond futures
We covered our short position in the September futures [USU9>USU9] yesterday after Greenspan’s comments awakened the market’s fears about future interest rate hikes. He implied that, if necessary, the Fed would not hesitate to raise interest rates at their August 24 meeting. Now there seems to be a distinct division between those who think
a tightening is probable and those who don’t.
As a result, we anticipate more range-bound trading as each side takes control on any
particular day. We established a long position at the 115 18/32 area with stops in at 114 14/32 area.
 |
| Figure 1. September T-bond futures (USU9), 15-minute bar. Source: Quote.com.
|
S&P 500 futures
The September contract [SPU9>SPU9] has been in a moderate downtrend on a combination of profit-taking and inflation fears. Volatility has picked up as the bears have come out selling. Since inflation fears are back into the limelight we anticipate faster and bigger moves ahead as the bulls and bears battle it out.
Unlike last week, it was the bulls who were in firm control and we could see by the extremely low VIX reading. We took a long position yesterday around 1370 with stops in at the 1348 area. Profit target at the 1385 area.
 |
| Figure 2. September S&P futures (SPU9), 15-minute bar. Source: Quote.com.
|
Currency futures
The September Swiss franc [SFU9>SFU9] and Euro [ECU9>ECU9] dropped early today, but not enough to interest us in covering our short position. We will exit the position at the close of trading today as the market is stronger than we anticipated.
If the U.S. stock market remains weak, these markets should continue higher as capital leaves declining U.S. stocks.
Note: The Swiss franc position was covered at .6585. See table above.
Next scheduled update: Monday, July 26, 1999
(Check “Today’s Schedule” every day on our home page to find out about additional updates.)